The four blasts took the lives of close to 40 people and injured 700.

"This illustrates the point that terrorists can attack where and when they want to, even in a country with a lot of experience," said Robert Hartwig, vice president and chief economist for the Insurance Information Institute Inc. in New York.

According to London police, four bombs on the city's subway and bus lines went off during the morning commute killing close to 40 people and wounding hundreds.

Brian Paddick, of the London Metro Police, said in a news conference that three subway lines and one bus were bombed.

Late reports today said there were 37 confirmed dead and 700 injured, but the figure could go higher.

Mr. Paddick said there was no warning given before the explosions, or credible claim of responsibility.

"We are shocked by what has happened, but not surprised," Mr. Paddick said.

The immediate effect for the industry, Mr. Hartwig speculated, could be a firming in pricing for terrorism insurance here in the United States, in contrast to the stability and declines the line has lately. But he felt the future of the Terrorism Risk Insurance Act, which is set to expire in six months, would have greater impact on the line if it expires. He predicted that event would see the hardening of the market for terrorism insurance and tightening of capacity just as the market is beginning to emerge.

"Insurers are worried about the size of the event and that is why they want to push TRIA," he said.

From a security standpoint, the London attack only underscores the difficulty insurers face. Mass transit is a very vulnerable target, said Christopher Grniet, vice president with Kroll, the risk mitigation division of Marsh & McLennan Companies.

"What does this mean to risk managers?" he asked. "Maybe it means that they have to go out and beef up the transit systems, but it is a delicate balance between security and accessibility."

"We can put in as much deterrent measures as possible," he added, "but you have to assume some level of risk. There is no guarantee of safety."

The first blast occurred on a subway car at 8:51 a.m., London time (3:51 a.m. EDT), with the other three occurring within minutes of one another. The bus explosion took place at 9:47 a.m., London time.

The explosion occurred as leaders from the industrialized nations were beginning their G-8 conference in Gleneagles, Scotland, hosted by British Prime Minister Tony Blair. Mr. Blair has left the conference and returned to London.

A spokesperson with ABI said by e-mail that London's subways and buses are self-insured.

In the United States, Secretary of Homeland Security Michael Chertoff said he has raised the security level from "Yellow" (elevated) to "Orange" (High) for the nation's mass transit system.

GE Insurance Solutions said it would close its London office Friday and allow employees to work from home while keeping its other offices open.

Concerning the economy, despite a downturn during the day, the markets closed up. American International Group, for example, which had dropped to close to $58 a share rose 17 cents to close at $59.31.